Mixed Deck — All TREC Topics Flashcards

What is required for a Texas licensee to use an assumed business name (DBA) in advertising?

Answer: The DBA must be registered with TREC and the county

To use an assumed business name, the licensee's broker must register the name with TREC, and it should also be filed with the appropriate county.

In Texas, the Real Estate License Act (TRELA) is enforced by:

Answer: Texas Real Estate Commission (TREC)

In Texas, the Real Estate License Act (TRELA) is administered and enforced by the Texas Real Estate Commission (TREC). TREC is the state agency responsible for regulating real estate brokers and sales agents, ensuring compliance with state laws, and protecting consumers.

A Texas licensee must disclose their license status when:

Answer: Whenever they are buying or selling property on their own behalf

TREC rules require licensees to disclose their license status in writing whenever they purchase, sell, or lease property for their own account.

Under a TREC contract, if the seller fails to complete agreed repairs before closing, the buyer may:

Answer: Terminate and receive the earnest money back, or accept the property with a credit

If the seller fails to complete agreed repairs, the buyer can terminate the contract and recover earnest money or accept the property with a negotiated credit.

If a licensee's sponsor broker dies or closes their brokerage, the licensee's license status becomes:

Answer: Inactive until the licensee affiliates with a new broker

Without a sponsoring broker, a salesperson's license becomes inactive — they may not conduct real estate activities until affiliated with a new, active broker.

What is the primary purpose of the TREC Standards of Practice for inspectors?

Answer: To establish minimum inspection procedures and reporting requirements

The Standards of Practice define the minimum scope of inspection and reporting requirements to ensure consistent, consumer-protective inspections statewide.

Under TREC rules, when is a licensee permitted to use a form NOT promulgated by TREC?

Answer: When an attorney-drafted form is provided for a specific transaction

A non-promulgated form may be used only when it is prepared by a licensed attorney and provided for a specific transaction.

A lot was purchased as an investment for $10,500 and sold a year later at a loss of 20%. If the owner paid a 10% commission, what was the owner's net loss on the sale

Answer: $2,940 10500X.20= 2,100 8400X.10=840 2,100+840=2,940

To calculate the net loss, first determine the loss on sale: $10,500 * 20% = $2,100. The sale price was then $10,500 - $2,100 = $8,400. Next, calculate the commission paid on the sale price: $8,400 * 10% = $840. Finally, the total net loss is the sum of the loss on sale and the commission: $2,100 + $840 = $2,940.

When may a TREC inspector accept additional compensation from a party other than their client?

Answer: Only with written consent from all parties to the transaction

A TREC inspector may accept additional compensation from another party only if all parties to the transaction provide written consent.

What is the primary purpose of the agency disclosure requirement in Texas real estate transactions?

Answer: To ensure consumers understand who the license holder represents and the duties owed

The primary purpose of agency disclosure is consumer protection — ensuring buyers and sellers understand the agency relationship, who the agent represents, and what duties are owed to them.

A Texas licensee wants to advertise on social media under a nickname. Under TREC rules, they:

Answer: May use a nickname but must also include their broker's name

Licensees may use a nickname or assumed name in advertising as long as the advertisement also clearly identifies their sponsoring broker.

Which of the following actions would constitute a breach of an agent's fiduciary duty of loyalty in Texas?

Answer: Purchasing the listed property for the agent's own account without full disclosure

Purchasing a listed property for personal gain without full disclosure to the seller-client is a breach of loyalty and constitutes a conflict of interest that violates the agent's fiduciary duties.

What is the minimum experience requirement before a Real Estate Inspector may apply for a Professional Real Estate Inspector license in Texas?

Answer: 1 year and 250 inspections

To qualify for a Professional Real Estate Inspector license, a candidate must have at least 1 year of experience and have performed a minimum of 250 inspections under supervision.

A licensee who discovers a property has an undisclosed material defect is required to:

Answer: Disclose it to the buyer regardless of the seller's wishes

Texas licensees have a duty to disclose known material defects to buyers even if doing so is contrary to the seller's instructions.

What is the role of TREC's Enforcement Division?

Answer: To investigate complaints and take disciplinary action against licensees who violate the law

TREC's Enforcement Division investigates complaints, gathers evidence, and brings disciplinary cases before the TREC Commission when violations are found.

Who regulates real estate inspectors in Texas?

Answer: Texas Real Estate Commission (TREC)

TREC licenses and regulates real estate inspectors in Texas, including establishing inspection standards and enforcing disciplinary rules.

Which TREC form is used for the sale of unimproved (vacant) lots in a residential subdivision?

Answer: TREC Form 25-14

TREC Form 25-14 (Residential Condominium Contract) is for condos, while vacant lots in residential subdivisions use Form 9-13.

In Texas, a real estate agent can legally represent both the buyer and the seller in the same transaction if:

Answer: Both parties give written consent.

In Texas, a real estate agent can legally represent both the buyer and the seller in the same transaction, acting as an intermediary, but only if both parties provide their informed, written consent. This ensures transparency and acknowledges the potential conflict of interest, protecting all parties involved in the transaction.

An appointed license holder working under an intermediary broker may NOT:

Answer: Disclose confidential information of one party to the other

An appointed license holder under an intermediary relationship must keep each party's confidential information private and cannot share it with the other party or the other appointed agent.

Which of the following is NOT typically required to be inspected under TREC's Standards of Practice?

Answer: Personal property contents inside the home

TREC's Standards of Practice require inspection of structural and mechanical components but do not require inspectors to evaluate personal property inside the home.